Green Alpha Advisors Introduces Next Economy Social Index ~ ThinkAdvisor

Originally published by ThinkAdvisor

With mounting evidence that diverse leadership teams more effectively drive creativity, innovation, and strong business performance, Green Alpha Advisors has introduced its Next Economy Social Index portfolio.

Green Alpha’s Investment Committee spent years testing potential variables before launching the portfolio at the end of 2015, and they have since been building track record with in-house assets invested in the strategy. It is now officially available as an option for clients to open separately managed accounts in the strategy.

To manage the Social Index, Green Alpha starts with their list of Next Economy Index constituents, then removes any that lack strong female representation in leadership and/or on the board.

They set starting weights based on market cap, with additional portfolio weight then given to companies that are doing more than the minimum needed for inclusion — for example, where women hold positions of significant authority, women have especially strong representation in leadership, and/or corporate policies are overtly socially inclusive.

According to Betsy Moszeter, Investment Committee member and COO at Green Alpha, “Gender diversity is clearly just one material aspect of any given team’s composition, but an important one that clients are asking about.”

“Clearly, investors are recognizing the value of diversity, too,” she said in a statement. “Done correctly, a diversity-centric portfolio can offer investors the opportunity to earn higher return-on-equity, benefit society, and reward companies that recognize the top and bottom-line impacts of significant female representation in leadership and on their board of directors.”


Important Disclosures